Skip to main content Skip to chat

Should I use cash or credit when travelling?

February 14 , 2018

Written by Barry Choi

Key takeaways

  • In some countries cash is still the main method of payment.
  • Don’t buy too much foreign currency before your trip. Find local ABMs, preferably ones that use your home bank’s network.
  • Credit cards are convenient and you don’t need to worry about carrying too much cash.

Should I use cash or credit when travelling?

When we travel, many of us use a combination of cash and credit cards for our spending needs. Which option we choose really depends on the circumstances, but knowing when to use either cash or credit could help you save money and make your trip less stressful.

When to use cash while travelling

Credit cards are generally accepted all over the world, but in some countries cash is still the main method of payment. Whether or not to use cash also depends on what you're doing: Taking public transportation or taxis, for instance, will usually require cash. If you plan on shopping in markets or with small businesses, cash could give you a little more bargaining power since merchants may want to avoid the fees they pay when you use credit.

Even though cash is convenient, I don't recommend changing too much cash into a foreign currency before you leave for your trip. Instead, use local ABMs once you arrive and withdraw cash as you need it. You'll be charged a foreign exchange fee, and possibly a transaction fee, but that still may be less than what your home bank could charge you to change your cash into a foreign currency. For example, when I travelled to the Middle East a few years back, my home bank was charging close to a 10% fee for Egyptian Pounds, and they didn't even offer service for the Jordanian Dinar. Instead, I used my debit card when I landed to withdraw money. I paid less in fees and was able to get the currency I needed.

If you look on the back of your bank card, you'll see the logos for your ABM network, such as Cirrus and Plus. When abroad, if you see a local ABM with the same logos, then you should have no problem using your card to withdraw cash. You may just want to contact your bank and let them know that you plan to use your card abroad, to prevent any potential card security concerns that could be triggered at the bank.

When to use credit while travelling

The main reason to use credit cards when travelling is convenience. By using plastic there's no need to worry about carrying too much cash. Some would even argue that using credit is "safer" since credit card companies usually won't hold you fully liable for unauthorized purchases. Also, if your card is lost or stolen, you haven't physically lost any of your money. In fact, some card cards offer a free emergency card replacement service in the event that you lose your card while travelling.

Which credit cards you carry with you is also an important consideration. It's unlikely you'll run into any problems using VisaR or MasterCardR, but some lesser known credit cards may not be as commonly accepted. Keep in mind that many credit cards charge a foreign exchange fee, so for all your purchases on credit, you'll pay an additional 1% to 3%.

If you do plan on using credit when abroad, there are a few other things to keep in mind. First off, be sure to let your credit card provider know that you're travelling since a charge in a foreign currency is normally a flag for fraud. It's also a good idea to make sure your personal identification number, or PIN, is four digits only as it's the accepted norm in most countries.

The final word

Whether you prefer cash or credit, circumstances may dictate your choice. Hawker stalls in Hong Kong will only take cash when you need a fix of curry fish balls. But when you're shopping on the Champs-Élysées in Paris, they'll happily accept your credit cards. Make sure you do your research in advance to find out what will work best for you.

Mastercard and Cirrus are registered trademarks of MasterCard Worldwide 1994 - 2015

Visa and Plus are registered trademarks of Visa International in the U.S. and other countries.

This article or video (the “Content”), as applicable, is provided by independent third parties that are not affiliated with Tangerine Bank or any of its affiliates. Tangerine Bank and its affiliates neither endorse or approve nor are liable for any third party Content, or investment or financial loss arising from any use of such Content.

The Content is provided for general information and educational purposes only, is not intended to be relied upon as, or provide, personal financial, tax or investment advice and does not take into account the specific objectives, personal, financial, legal or tax situation, or particular circumstances and needs of any specific person. No information contained in the Content constitutes, or should be construed as, a recommendation, offer or solicitation by Tangerine to buy, hold or sell any security, financial product or instrument discussed therein or to follow any particular investment or financial strategy. In making your financial and investment decisions, you will consult with and rely upon your own advisors and will seek your own professional advice regarding the appropriateness of implementing strategies before taking action. Any information, data, opinions, views, advice, recommendations or other content provided by any third party are solely those of such third party and not of Tangerine Bank or its affiliates, and Tangerine Bank and its affiliates accept no liability in respect thereof and do not guarantee the accuracy or reliability of any information in the third party Content. Any information contained in the Content, including information related to interest rates, market conditions, tax rules, and other investment factors, is subject to change without notice, and neither Tangerine Bank nor its affiliates are responsible for updating this information.

Tangerine Investment Funds are managed by Tangerine Investment Management Inc. and are only available by opening an Investment Fund Account with Tangerine Investment Funds Limited. These firms are wholly owned subsidiaries of Tangerine Bank. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.